Making Minimum Wage

by Rachel Vilsack

Raising the federal minimum wage was a topic “raised” in the recent State of the Union address. Currently the federal minimum wage is $7.25 an hour. A full-time minimum wage worker nets about $15,080 annually, before taxes. Let’s take a closer look at who makes minimum wage in Minnesota.

According to a 2012 Minnesota Department of Labor and Industry report (pdf) on minimum wage:

Minimum wage workers are more likely to work part-time; 72 percent of all workers paid the minimum or less were part-time workers.

Among hourly workers, seven percent of women earned the minimum wage or less, compared to five percent of men.

The group with the highest proportion of hourly workers paid the minimum wage or less was food preparation and serving workers.

About 19 percent of hourly workers paid minimum wage or less had less than a high school diploma or less.

Minimum wage workers are younger; 60 percent of all hourly workers paid the minimum or less were 15 to 24 years old.

Minimum Wage Laws

The federal minimum wage was established in 1938 and set at 25 cents per hour, as a way to raise the earnings of low-wage workers following the Great Depression. From its initial 25 cents per hour, the federal minimum has been raised a few dozen times. It stood at $5.15 from 1997 to 2007, and was raised to its current level of $7.25 in 2009.

Did you know that minimum wage laws vary by state? Congress gave states the power to set their own minimum wage above the federal level. In fact, 19 states (and the District of Columbia) have higher state minimum wages. At $9.19 per hour, Washington has the highest minimum wage among states. (The city of San Francisco enacted a minimum wage ordinance of $10.55 per hour starting in 2013.) Four states, including Minnesota, have minimum wages lower than the federal standard. However, federal minimum wage laws supersede state laws in most cases.

For more information about wage laws in Minnesota, visit the Labor Standards Office at the Minnesota Department of Labor and Industry.